So, you’ve set up your programmatic ads and you’re waiting for all those leads to come pouring in. Yet, very few seem to be coming in. You may ask yourself if the ads are the problem: should you change your ad creative? Or, are your CTAs not strong enough?
Those all could be the issues behind your lagging ad performance, but most likely, it has nothing to do with your work. And everything to do with two factors: how your ads are being delivered and if you’re doing your due diligence.
It turns out that only 3 cents from every dollar you spend on programmatic delivers viewable ads. In 2017, $25.23 billion is expected to be spent on programmatic out of a total $72.09 billion of digital advertising spend.
Only $757 million in advertising spend will deliver viewable programmatic ads out of $25.23 billion. Out of your dollar, 60 cents goes to agency, platforms, data, ad exchange and more: see the chart below. That leaves only 40 cents remaining. Bob Hoffman, the mind behind the Ad Contrarian site, breaks it down marvelously and I took it from him.
So why aren’t your ads being viewed?
1. Viewability: According to Digiday, only 50% of ads are actually viewable leaving 20 cents remaining. What does viewability mean? It’s an online metric intended to track the impressions that are viewable.
What could affect viewability? Location is one: If an ad is at the bottom of the page and the visitor doesn’t scroll down.
2. Advertising fraud: We can conservatively say that 30% of those go to fake sites and clicks. Only 16 cents remain. Just to recap, that means $1 billion in ad spend is going to advertising fraud. That’s a conservative estimate: In reality the amount is likely much higher. In 2016, the association of national advertisers said that $7.2 billion will be lost to ad fraud. The average cost per participant in their study was $10 million.
Ad fraud costs $7.2 billion for advertisers. Tweet it!
What exactly is ad fraud? There are two ways to go about it. Either you sell traffic to publishers who believe they can make more money from ad revenue than from the cost of traffic. Or you can set up your own website, send traffic there, and sell your own ad space.
Botnets drive traffic through a network of hacked personal computers called drones that browse the internet to grab as many advertising dollars as possible.
And botnets are just a hint of what could be a larger cultural issue in advertising, condoning illegal business practices. In December 2016, the advertising world was rocked by a scandal involving 4 out of the top 5 advertising agencies. They were implicated in a probe into price fixing and other illegal business practices. That means advertisers need more than ever to understand what they’re buying.
3. Valid impressions actually seen by people Research shows that only ⅔ of viewable impressions are actually seen by someone. Now only 11 cents remain out of the 40 cents.
4. Time spent on page: The same research shows that ¾ of the time people don’t even spend a second looking at the ads on the page. They bounce right in and right off the page.
¾ of the time people don’t even spend a second looking at the ads on the page. Tweet it!
There Are 3 Reasons Why Only 3 cents Goes to Working Ads
1. Pressure to lower the price. In the past few years, there has been increasing pressure on agencies to lower fees and agree to difficult payment schedules. Clients essentially want more for less, so they shouldn’t be surprised when they get less for less (even when the numbers say that they’re getting more for less). Which leads right into the second point.
2. Expertise gap for brands and other advertisers: It’s no surprise that the velocity of our rapidly changing media environment results in a knowledge gap between advertisers and agencies. It’s hard to keep up with the innovations in technology but it’s also part of the advertiser’s due diligence to understand what the agency is providing for them.
3. Audit rights: Advertisers often don’t take the time to check the agency’s numbers and what they mean, or they don’t know that they have this right. In some cases, advertisers only have limited audit rights. It’s in the best interest of everyone to understand from the outset what the advertiser’s rights are to audit (and to use those rights).
Even with audit rights, having a third party that can provide full, accurate and transparent data on ad results is critical to judging whether your agency is making the best use of your advertising dollars.
Reputable agencies welcome third party assessments and even offer it to their clients. xAd, one of our clients, uses our pay-per-call reporting for client billing. They found the added accountability helps them prove the value of their work to their clients and add new clients.
Data Transparency helps Agencies and Brands
Unbiased, third-party analytics for all types of responses helps brands to make better decisions and agencies to drive higher quality responses. Going beyond measuring impressions and clicks, analytics measures the real-world steps consumers take to reach you. A call or a text from a live consumer can’t be faked unlike an impression.
1. Dynamic number insertion measures the true ad performance cross-channel: Our state-of-the-art technology provides solid attribution, linking conversions to the source that drove them with call and text tracking numbers.
- Brands can compare the CPL across all platforms to see which channel provides the best value, keeping agencies accountable for their decisions.
- A phone call is the most reliable metric to judge the effectiveness of advertising. If a customer calls using our call tracking numbers, you know that she has seen the ad and that it drove the response you were seeking. The same can be said about text leads that come through our text-enabled tracking numbers.
2. Offer texting to drive 43% more leads: We found that by offering texting on ads and landing pages, the number of leads increased significantly.
- Using textable call tracking lines, you know exactly which ad generated the most response and the highest quality leads.
- As with calls, tracking text messages provides a robust measurement of your advertising performance that goes beyond clicks and impressions.
3. Fraud and spam prevention: Our call tracking lines and response analytics reporting provide third-party, unbiased data on your advertising performance with no nuisance calls diluting your data.
- Our smart algorithms prevent spam and fraudulent calls from reaching your business, including telemarketers or toll-free pumping.
- Custom call block allows you to pick which callers to block.
There are some significant pitfalls to mobile marketing that can result in ineffective ad spend and numbers that look good on paper - a high number of impressions, but have little to no impact on your bottom line. In 2017, marketers are feeling the pressure to provide full attribution and to contribute to business growth. This is difficult to do if you have to deal with all these pitfalls.
There are two easy steps you can take today to avoid mobile marketing pitfalls:
- Find out how your ad spend is being used. Ask your agency for full transparency to make decisions based on the facts.
- Use third-party data for full and accurate attribution that connects advertising to the consumer’s response. This is the best measure of an ad’s performance.